DOF calls for meeting on B5 fuel implementation amid rising cost

Published August 16, 2018, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor


DOF logo
DOF logo



Caught in between rising fuel prices and falling copra prices, the Department of Finance (DOF) hopes to address both issues by calling for a meeting about the implementation of the law mandating that all diesel fuels sold in the domestic market be blended with five percent Coco Methyl Ester (CME), known in the industry as B5.

The said meeting, according to a source, will be both attended by the Department of Energy (DOE) and Philippine Coconut Authority (PCA).

It was supposed to happen on Wednesday but it was moved to another schedule.

To recall, while the DOE already began advocating the use of cheaper and dirtier diesel to tame inflation, PCA has remained persistent about pushing for B5 implementation.

Once the CME requirement on biodiesel is set at 5 percent from 2 percent, pump prices will increase by P0.45, based on the study made by Asian Institute of Petroleum Studies, Inc (AIPSI).

But for PCA, the economic gain from increasing the CME requirement to 5 percent, known in the industry as B5, will later on offset its possible effect on pump prices — which could be the last thing the DOE wants to consider since higher fuel cost is one of the reasons why the country’s inflation is at its highest level in five years.

Right now, pushing for B5 seems to be in contrast with DOE’s strategy to temper rising oil prices.

The DOE, in an attempt to reduce the price of fuel, just recently told fuel companies to make available Euro-2 compliant automotive diesel, which is cheaper than the presently required and much environmentally friendly Euro 4 fuel.

The agency also recently ordered Philippine National Oil Company (PNOC) to import low-cost fuel to reduce the price of diesel.

“DOE is suggesting to include in the agenda [for the meeting] to talk about how we can communicate properly the beneficial effect of B5 blend and its economic impact to the farmers. [They also want to discuss] how this can reduce the importation of petroleum,” PCA Administrator Romulo Dela Rosa said on the sidelines of first ever World Coconut Congress in Pasay.

“This has to be communicated well. We have to have a good communication plan in order for this to be understood by the public,” he added.

The AIPSI study showed that that the biofuels industry would need at least 360 million liters of CME per year if it were to implement B5.

To produce this amount of CME, some 489.8 million kilos of copra are needed, which could effectively increase the price of copra in the country.

“Aside from helping stabilize copra prices, production of B5 biodiesel can also help the country save on foreign exchange because of foregone diesel import of about 430 million liters a year,” De la Rosa earlier said.

For his part, Agriculture Secretary Emmanuel Piñol said he supports B5 implementation and would present its positive effect on the economy during the next cabinet meeting with President Rodrigo Duterte.